Crypto markets moved higher as traders entered risk-on mode as expectations for a rate cut at the November FOMC meeting rose.
The Chicago Mercantile Exchange (CME) FedWatch tool shows that the probability of a 25 basis point rate cut on November 7 is now 94%, up from 80% last week. At the close of U.S. stocks, the S&P, Dow and Nasdaq all rose, up 0.47%, 0.79% and 0.28% respectively.
According to Bitpush data, Bitcoin bulls hit a new monthly high of $68,400 that day. As of press time, the trading price of Bitcoin fell back to $67,690, a 24-hour increase of 1.36%.
Altcoin markets were mixed, with FTX Token (FTT) the best performer among the top 200 tokens by market cap, up 14.4%, followed by Dogecoin (DOGE) and Scroll (SCR), up 10.8% and 8.1%, respectively. BinaryX (BNX) led the decline with a 12% drop, while Popcat (POPCAT) fell 9.1% and Memecoin (MEME) fell 9%.
The current overall market value of cryptocurrencies is $2.32 trillion, and Bitcoinâs market share is 57.7%.
Warning Signs of a Potential Correction
Some experts believe that the market may see a short-term correction as retail investors begin to feel FOMO.
"As the Fear & Greed Index shows, current market sentiment is sending critical signals that cannot be ignored," said Shubh Varma, co-founder and CEO of Hyblock Capital. "First, the swings between Fear and Greed are becoming more frequent and shorter in intervals. This narrowing suggests that uncertainty remains high and the market is highly sensitive to even the smallest triggers."
Additionally, Varma said: âOn the retail side, the proportion of retail longs is now close to low levels, with less than 40% of Binance BTC accounts in long positions. This indicator fluctuates between 0 and 100, but usually stays in a narrower range, which makes the current low reading more significant.â
He explained: "When retail participation in long positions reaches such low levels, the likelihood of a reversal increases. Historically, when this indicator flips from lows to highs, it suggests that retail traders are entering long positions en masse - typically a bearish sign. Retail investors tend to be on the wrong side of the market, and their switch from shorts to longs often marks a local top. When they enter long positions en masse, the market tends to reverse lower. If this trend follows its usual pattern, we could soon see a correction designed to catch retail investors off guard once again."
According to CoinGlass, Bitcoinâs OI reached $39.36 billion on Oct. 16, a new year-to-date high and surpassing the previous 2024 peak of $38.8 billion set on April 1.
Varma stressed that Bitcoinâs open interest (OI) â the total number of derivative contracts that have not yet been settled â has reached âhistorical resistance levels and a corrective move to clear long positions may be imminent.â âA price decline followed by a drop in OI could confirm this correction,â he said.
Peter Brandt, a senior trader, said that the price of Bitcoin may fluctuate in both directions. He said on the X platform: "The price of Bitcoin is in a window period. Will Bitcoin break upward or fall under pressure?"
Meanwhile, independent trader BitQuant believes that after breaking through $70,000, Bitcoin may see a long-term consolidation between $95,000 and $75,000.
